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Quest Means Business
X CEO Yaccarino Stepping Down After Rocky Two-Year Tenure; NVIDIA Market Cap Temporarily Rises Above $4 Trillion; U.S. and European Union Near Trade Framework Agreement; Ceasefire Talks in Doha as Israel PM Visits Washington; Death Toll Climbs Following Devastating Texas Floods; Red Bull Boss Christian Horner Fired After 20 Years with Team; U.S. Grocery Stores Grapple with Tariffs, Labor Shortages. Aired 4-5p ET
Aired July 09, 2025 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:14]
PAULA NEWTON, CNN INTERNATIONAL HOST: That is a tidy -- a tidy we call it, uptick on the Dow there. The markets really having a good day considering
they're either close to or setting new records. Those are the markets. And these are the main events.
After two tumultuous years with Elon Musk, Linda Yaccarino steps down as CEO of X.
NVIDIA becomes the first company to be valued at $4 trillion.
And fired after 20 years, Red Bull Formula One boss, Christian Horner is out.
Live from New York. It is Wednesday, July 9th. I'm Paula Newton, in for Richard Quest and this is QUEST MEANS BUSINESS.
Good evening.
Tonight, the CEO of X says she is stepping down after what was a rocky two- year tenure. Linda Yaccarino faced repeated problems over hateful content and on the platform, and controversial comments from Elon Musk himself, who
was the CEO of X before she got the job.
Now, she was tasked with turning around an exodus of advertisers who were concerned about the company's moderation practices. Yaccarino says the best
is yet to come. That was after Musk sold X to his artificial intelligence company, xAI.
Clare Duffy is in New York.
Look, it was a little bit surprising today just because it was abrupt, but so many people had called this really from the day that she got the job.
What more are you learning about how this went down and how it is going to continue to affect X?
CLARE DUFFY, CNN BUSINESS WRITER: Yes, Paula, I mean, look, this wasn't necessarily something that we were expecting today, but as you said, Linda
Yaccarino lasted a lot longer than I think a lot of people expected her to, given the controversies that the company has faced in the time that she has
been CEO, everything from lawsuits over companies that are talking about the hate speech that are on the -- that is on the platform to, of course,
Elon Musk's involvement in politics, the controversy there.
You know, and the question, too has been how much control did she really have over this company? Elon Musk is such a mercurial leader. He was known
to just make these pronouncements about what was going to happen on the platform, who was going to be allowed on the platform, at random times, and
it is not clear how much control she really had over the company. And I think that has been something that is weighing on her as the leader.
But I think the key part of her exit announcement today, which did include a lot of details about her decision making, why she is leaving right now,
but she hints at xAI, which I think is really the key here.
X, as you said, was acquired by xAI just a few months ago, and that raised questions about her leadership role in the combined company. She was really
brought into X to help put out fires, and if she is not the head of the company anymore, it is unclear how much control she really had and the
ability that she had to do that, which of course has become especially relevant this week, as we saw Grok, the A.I. chatbot on X yesterday,
starting to spew antisemitic tropes.
I think there were questions about just how much she could do about the A.I. side of the business, since she was head of the social media side of
the business. So again, a lot more of that remains to be seen here about the specific reasoning, but I wouldn't be surprised if that -- the fact
that she was no longer top dog at the company had a lot to do with her exit today.
NEWTON: Yes, but also obviously having a lot to do with the exit would be the issue of was she actually able to make X a money-making proposition? A
lot was said about how much Elon Musk paid for this company and then how its worth has been devalued. I mean, some of the stuff that she would come
up with almost kind of threatening advertisers, right, if they didn't come back and advertise with X.
Where do you see that going in the next few months?
DUFFY: Yes, I mean, even the company sued under her leadership an advertising industry group for saying that advertisers should pull their
spending from the platform because ads were, for example, showing up next to Nazi content. That advertising industry group shut down after the
company sued it.
So she has in some ways gone after advertisers who were wary of spending their money placing their ads on this controversial platform. You know, we
have seen some advertisers in recent months returning to the platform, but I think the general consensus is that X's reputation is no longer ever
going to be the same as what it was when it was Twitter.
The other big goal that she came into the platform with was to make it the everything app, and it is not clear that that has happened either. They've
rolled out some finance features, there are podcasts, video, podcasts from people like Khloe Kardashian on the platform, but I think everybody still
really thinks of X as a social media platform and not this everything app that she was hoping to make it.
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NEWTON: Yes, it is good that you remind us just of those lofty ambitions, which would be interesting to see if Elon Musk says those are still in
place, his vision for X.
Clare Duffy for us -- go ahead.
DUFFY: I was just going to say, it was interesting to see his reaction too, to this. He sent a very terse reply to her post saying, "Thank you for your
contributions," but no sort of, you know, lots of praise for her in his response there. It was very terse, very short, and I think that is
interesting to note as well here.
NEWTON: It indeed is, Clare Duffy for us. Thanks so much. Appreciate it.
Now, Linda Yaccarino's departure comes as X faces controversies. As Clare was just saying, those controversies are across continents over its Grok
chatbot, a new model of it, Grok 4, is set to launch in just a few hours from now.
Last month, Elon Musk had said an earlier version was "parroting legacy media" and that he was unhappy with it. On Tuesday, Grok's account posted
that it is working to remove inappropriate posts after the bot started pushing antisemitic tropes.
In Turkey, a court blocked access to Grok content altogether. It said the bot generated responses insulting the President and the country's religious
values, and in April, Ireland's data regulator said it had started to investigate X over the use of personal data to train that bot.
Vivian Schiller is the executive director of Aspen Digital. She previously served in high level roles at Twitter, NBC, CNN and other media
organizations, and she joins us now.
I mean, I am wondering to hear from you how you believe that intersection of both social media, which has proven incredibly difficult to moderate.
And now A.I., right, that intersection. It is so interesting. Grok is the first example of it. How do you think this happened? And do you think it is
a coincidence that it happened on Grok, the X bot first?
I am not sure we can hear Vivian. We will give you a second, Vivian there. we are going to give Vivian a second there. We are having some technical
difficulties and we will get an answer to that question.
In the meantime, NVIDIA shares rose temporarily, bringing its market value in around that $4 trillion mark, that was for the first time. And it is the
first publicly traded company to hit that milestone, beating out competitors like Apple and Microsoft.
Now you see it there, it was up 1.77 percent. Today, it marks a strong rally for the chip designer, which as you can see, there has been one of
the biggest beneficiaries of the A.I. boom. Its shares up 280 percent in the last two years. But look at that uptick really, since it was down even
in April.
Anna Stewart has been following all of this for us. What does it tell us, right, $4 trillion. This is not for -- I mean, it is all about the chips
and all about the leader of NVIDIA himself who has been able to really be the architect of this A.I. boom.
ANNA STEWART, CNN REPORTER: Yes, you really can't separate artificial intelligence from NVIDIA. It is the sort of foundation company, maybe along
with Microsoft, which is actually also expected to hit $4 trillion market cap sometime this year. It could be following close behind.
And this is just showing that the A.I. boom is very robust, despite those - - remember those early in the year sort of worries about DeepSeek and China and how perhaps A.I. didn't need to be so expensive, perhaps it didn't need
very advanced chips from the likes of NVIDIA. Well, there are clearly no concerns about that now in looking at the stock price.
What is so interesting is despite the export controls, despite the fact that NVIDIA is currently unable to sell so many of its chips to one of the
biggest markets in the world, it is doing absolutely fine. Revenue is expected to increase 55 percent this year versus last year, and earlier on
in the week, a Citi analyst put out a report saying they are putting a price target of $190.00 on this stock, which is perhaps part of the rally
that we've seen.
So here we are, a huge rally despite a trade war, can't see any elements of a trade war on equities today -- Paula.
NEWTON: You know, it is interesting that you do mention the DeepSeek. Is there a view that competitors could come in here? Because NVIDIA seems the
whole ball game at this point.
STEWART: Yes, I mean there is always a discussion about whether Huawei can compete in China, whether AMD, a potential competitor when it comes to A.I.
chips. Currently, NVIDIA does very much hold sort of the crown jewel when it comes to A.I., and it is used by Microsoft, Apple, Amazon, all of the
big tech giants is using data centers.
The GPUs, particularly the newest one, the Blackwell Ultra, really underpins artificial intelligence in the big large language models. It is
hard to see competitor taking that away any time soon, which is why everyone is so bullish on this stock and actually Loop Capital have put out
a forecast saying they expect NVIDIA to hit $250.00 a share at some stage, which would give it a $6 trillion market cap.
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So while you look at that two-year chart and you see how extraordinary that rise has been, it could go a lot further. The A.I. boom has a long way to
run. And while NVIDIA is very much the foundational company of that, you know, this is where the shares look to be heading.
NEWTON: Yes, it is interesting because sometimes saying foundational companies sometimes are not the ones that benefit the most from these kinds
of technologies. Anna Stewart for us, really appreciate it.
And we do want to get back to Vivian Schiller. She is the executive director at Aspen Digital, and I hope you can hear me and I can hear you, I
believe, Vivian, good for you to be with us.
VIVIAN SCHILLER, EXECUTIVE DIRECTOR, ASPEN DIGITAL: Thank you. I am so glad to be here. I am assuming you can hear me now.
NEWTON: We can. And so just to get back to that question, right, in terms of Grok and this bot and those antisemitic tropes, how do you think that
came to be?
SCHILLER: Oh, well, there is -- I mean, we know how it came to be because Elon Musk has told us precisely. Elon Musk has been tweaking the
instructions to the Grok bot about how it should be replying, and if you've been following the story over the last number of months, first, there was
an issue that no matter what the question was, was the answer was about the alleged murder of White farmers in South Africa, he realized that was a
problem. He had his engineers tweak it again. Then it started actually giving reasonable answers pulled from the data that it was trained on,
including sort of legitimate news sources, but that was deemed to be too woke, and so he tweaked it again.
He signaled this over the weekend that he had thought that Grok was too woke. He tweaked it again. And now the last few days have just been an
abomination of -- it has just been a horror show the kinds of horrible things that Grok has been parroting, just really racist, inflammatory,
terrible things. So now they say they are going to fix it again.
But this is in control -- this is the -- you know, this is -- the engineers can control this and they are.
NEWTON: And so I want to get to that point because A.I. in general is supposed to be a learning model, right, so it is almost as if you're
telling us that, you know, an A.I. bot is only as good as the data that is inputted, but isn't it supposed to be doing a wider search? And we are told
that, in fact, it can actually think for itself.
So what happened here? Do you really believe it was wholly and totally the manipulation of Elon Musk here? Because it hasn't done his company any
good, whether -- even if he wanted that to be the outcome.
SCHILLER: No, it would say very much it is not doing his company any good.
Look, I think there is a sort of a micro and a macro point here. The micro point is, first of all, A.I. systems do not think for themselves. They do
not think. They have predictive responses based on all of the data that they have ingested, and also the instructions that they are given by
engineers about how to reply to questions. So that's how this came to be.
A lot of other more responsible A.I. models do pull from a broad, broad variety of data. Basically everything, every piece of digital information
and data point that is on the internet, although -- and even there, you get certainly a lot of mistakes and hallucinations and problems. But there are
certainly better A.I. models out there.
But the macro point here is this is terrifying. I mean, even yes, Elon Musk presumably is going to fix this. But there is a larger point about how
these A.I. models can be manipulated, and they can be manipulated in such a way that they can spew information that can actually influence people all
over the world.
So it is a very concerning, complicated set of developments.
NEWTON: When you say it is concerning, though, and complicated, we have been dealing even on social media with moderation that is an abject failure
really many times when you see anything that is racist, antisemitic, or even things like child pornography that still show up, what is the solution
here when A.I. continues to gallop forward?
You know, I heard you on a talk two years ago talking about kind of some of the dangers and the pitfalls writ large for A.I. We are two years later,
when you were speaking of that and none the wiser.
SCHILLER: None the wiser, because A.I. isn't -- well, we may be wise to it, but we are not on to a solution yet with the roil we hear. The A.I.
advances have been just astronomical and faster than I think even the A.I. elites have expected. So it is just very hard for policy, both sort of
small "P" policy, how companies are managing it, and big "P" policy, how governments are thinking about regulating it to keep up.
So you know, there is a solution, though, about content moderation. I mean, it is not -- I don't mean there is a perfect, you know, light switch that
if you flip it, everything is fixed. But prior for instance, at Twitter, prior to Elon Musk's acquisition of the platform and this is well post when
I was there, there were very good content moderation policies in place.
[16:15:14]
They were not perfect, but they were pretty good. Elon musk ripped those out and Linda Yaccarino is now taking credit for fixing content moderation,
but it is not true.
NEWTON: Yes, Vivian we only have like 30 seconds left. But I mean, even Meta is not moderating the way it used to, right? Not even using the tools
--
SCHILLER: They are not.
NEWTON: Why?
SCHILLER: That's right, because the political winds have shifted and the political winds now are such that based on a lot of sort of rhetoric that's
been shouted over the last couple of years, these platforms have decided that the liability for them to not be attacked for moderating content or
suppressing free speech, which of course is not the case, it is just not worth it for them politically to run up against the administration.
NEWTON: Yes, and I point out that might be the political situation here in the United States and the law here in the United States. That is not true,
though, of the other jurisdictions. And as you rightly point out, we will see what those other jurisdictions do about this.
Vivian Schiller, always good to have you. Really appreciate it.
SCHILLER: Thanks for having me.
NEWTON: Now, the United States and the E.U. are apparently getting close to reaching a trade deal. Officials expect an announcement before the end of
the week. We will have more on that next.
(COMMERCIAL BREAK)
NEWTON: The White House has informed seven more countries of the tariff they will face starting August 1st. President Trump sent letters to The
Philippines, Sri Lanka, Moldova, Brunei, Algeria, Libya and Iraq. Those countries have been threatened with tariffs as high as 30 percent.
Now, meantime, the United States and the E.U. are nearing a trade framework that would set U.S. tariffs at 10 percent. Officials say the agreement
would lay out parameters for extensive trade discussions going forward. The agreement is expected to be announced before the end of the week.
Elizabeth Buchwald joins me now.
I have to say, it is surprising that the E.U. maybe this close to a deal. We always had heard that the 10 percent was the baseline, and if it gets
done, is it true that the tariffs obviously would still be higher compared to what was in place, right, when Trump's second term began?
ELISABETH BUCHWALD, CNN BUSINESS ECONOMICS REPORTER: Yes, that's correct. But the way to look at it is, is it better than what could have been? And
so the Trump administration had proposed 20 percent tariffs back in April. So it is still better, but it is not what it was.
[16:20:07]
And I think that's what many countries are seeing that you're not going to get back to those levels that once were.
NEWTON: I think a lot of people and I say people, I mean negotiators for these countries have reconciled themselves to 10 percent.
In terms of more of those critical sectors, though and especially when it comes to the United States being able to sell into Europe. Anything more on
that?
BUCHWALD: The details are still fuzzy right now, and I am sure we will get more, or actually, I am not so sure we will get more. With Vietnam, we
still have yet to see a lot of details, but I know there have been a lot of discussions on the E.U. side about getting the U.S. to lower tariffs on
autos and on steel, and within the U.S. side, the Trump administration has been arguing that there are too many barriers to trade and that they would
like to see the E.U. buying more from the U.S. because of these deficits that exist.
NEWTON: Interesting. Now, Elizabeth, as you and I have been talking, Donald Trump has actually posted that Brazil will get a 50 percent tariff.
Now, look, there has been a lot of tension between President Lula, leader in Brazil, and Donald Trump, also involving Lula's predecessor, Bolsonaro.
But if we get to the economics of it, given certainly Brazil's natural resources, 50 percent tariff would be highly significant.
BUCHWALD: I just want to point out, that is a very interesting number, because two months ago, trump had actually threatened a 50 percent tariff
on the E.U. So the tides have really turned here. And you're seeing that unfold literally in live time right now. That would be very significant and
that's exactly what the Eu is trying to avoid.
NEWTON: Yes, and this goes back to what you were just telling us, right, 10 percent sounds very good compared to where they could have been.
Elizabeth Buchwald for us, always staying on top of trade. It has been quite a job the last few months. Appreciate it.
BUCHWALD: Thank you.
NEWTON: Now, U.S. President Donald Trump told African leaders today that he'd like to visit the continent at some point. Mr. Trump had lunch with
the Presidents of Gabon, Senegal, Liberia, Guinea-Bissau and Mauritania.
The White House says the goal of the meeting was to explore commercial opportunities.
Larry Madowo has been following this meeting and has more for us.
(BEGIN VIDEOTAPE)
LARRY MADOWO, CNN CORRESPONDENT: What President Trump led with at this meeting with five African nations showed the true intentions of this White
House gathering the leaders of Mauritania, Senegal, Gabon, Guinea-Bissau and Liberia have all one thing in common. They're small economies, but with
rich mineral deposits, rare earth minerals, gold, oil, manganese, iron ore and they are offering these to the United States, to American companies.
They are looking for win-win solutions as President Brice Oligui Nguema of Gabon said.
President Bassirou Diomaye Faye even further, though, he actually offered a golfing investment opportunity for President Trump and said it would be a
few hours flight from Miami or from D.C. you can show off your golfing skills because world leaders have learned that to really do business with
President Trump, you have to appeal to him. You have to fawn. And they all did that beautifully.
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: Represented today and your continent is represented by Gabon, Guinea-Bissau, Liberia,
Mauritania and Senegal -- all very vibrant places with very valuable land, great minerals, great oil deposits and wonderful people.
JOSEPH BOAKAI, LIBERIAN PRESIDENT: Mr. President, we thank you for this opportunity to be here. Liberia is a longtime friend of the United States
and we believe in your policy of making America great again.
MADOWO: An awkward moment there after President Joseph Boakai of Liberia spoke, and President Trump appeared to be surprised that he spoke such
excellent English, he asked him, where did you learn to speak English so beautifully? And President Boakai smiled and nodded and said it was in
Liberia. He didn't point out that English is the official language of Liberia.
Another curious moment, President Trump handpicked one of his favorite reporters, an African reporter, and she asked these leaders if they would
nominate President Trump for the Nobel Peace Prize, which she knows has become a recent obsession of President Trump. They said they would or they
would look into it, that they would not be opposed to it.
Again, they're trying to be nice to him as their host. They're not trying to antagonize him.
One thing that didn't explicitly come up, but is the subtext here is China. That was the elephant in the room. These countries are not explicit allies
of BRICS. And so they are easier entry points for the U.S. into this new commercial diplomacy that President Trump is favoring in relations with
Africa.
Larry Madowo CNN, Lagos, Nigeria.
(END VIDEOTAPE)
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NEWTON: Russia has launched its largest drone attack on Ukraine since the beginning of its invasion. It comes a day -- just a day after President
Trump publicly criticized his Russian counterpart, Vladimir Putin.
Ukraine's Air Force says the assault involved more than 700 drones and missiles. At least one person has been killed.
Meantime, we've learned that U.S. Defense Secretary Pete Hegseth did not inform the White House before pausing weapons shipments to Ukraine last
week. Now, his decision set off quite a scramble within the administration.
Natasha Bertrand is in Washington.
Youve been getting quite the insight into this scramble, and I am wondering what more you've learned.
It is startling that the President claims he didn't know anything about this. And more than that, that now, from a policy perspective, things are
really changing quite rapidly.
NATASHA BERTRAND, CNN NATIONAL SECURITY CORRESPONDENT: Yes, it is really whiplash for the Ukrainians and this is not the first time actually that
Secretary of Defense Pete Hegseth has halted a shipment of weapons to Ukraine without informing senior National Security officials and then
having that reversed almost immediately.
But what happened here was that essentially, President Trump asked Secretary Hegseth for an accounting of all U.S. weapons stockpiles that
exist around the world, just to make sure that the U.S. had really key stockpiles of munitions, including air defense systems, air defense
interceptor missiles that are necessary, particularly at this time for troops in the Middle East that are often caught in the crossfire between
warring Iran and Israel, particularly last month.
But what Hegseth took from that is he essentially delegated that downward to his deputy, and that person, the Undersecretary of Defense for Policy,
Elbridge Colby ultimately recommended that because this broader review was ongoing, of all of the shipments around the world of U.S. stockpiles of
munitions, it would make sense to stop this particular shipment of weapons to Ukraine.
Secretary Hegseth agreed, he authorized that. But that is where the communication really started to break down, because we are told that that
pause that he authorized was not communicated to the White House. It was not communicated to the National Security Adviser, Marco Rubio, who is also
the Secretary of State or President Trump himself. They learned about it from press reports.
So what happened was President Trump then immediately told Hegseth that he wanted him to continue sending at least part of that weapons shipment.
Notably, the Patriot interceptor missiles, which are really, really key for Kyiv as they try to protect their major population centers against these
kinds of Russian missile barrages that you see almost nightly there, and so this decision was essentially reversed almost immediately.
But it really does raise a lot of questions here about the kind of haphazard policy making that goes on inside the Trump administration,
particularly under Secretary Hegseth at the Department of Defense. Secretary Hegseth appeared alongside Trump yesterday when Trump said that
they are going to be sending these weapons now to Ukraine and was just kind of nodding along. But the White House has refused really to say one way or
another, just what Trump knew about this and when -- Paula.
NEWTON: Yes, and yet the way you laid it out there for us, really, as you said, gives an indication that the communication really broke down on
something -- on such an important issue. It is extraordinary that that happened.
Natasha Bertrand, for us. Thank you.
Now, President Trump says he believes Israel and Hamas are very close to a ceasefire deal for Gaza. Israeli Prime Minister Benjamin Netanyahu met with
the U.S. Defense Secretary, in fact, today in Washington. That follows two days of talks on Gaza with President Trump.
Ceasefire talks are underway in Qatar.
Meantime, President Trump's special envoy to the Middle East, Steve Witkoff, says a ceasefire deal could come by the end of the week.
CNN's Jeremy Diamond has more now on those talks from Tel Aviv.
(BEGIN VIDEOTAPE)
JEREMY DIAMOND, CNN JERUSALEM CORRESPONDENT: Well, there is no question that there is progress being made in those negotiations between Israel and
Hamas over a potential ceasefire and hostage release deal, both in the Qatari capital of Doha, where those proximity talks are taking place, but,
also in Washington. D.C., where critical negotiations are taking place between the Israeli Prime Minister and his team and President Trump and his
administration.
But the fact that we saw President Trump sitting down with Prime Minister Netanyahu last night for the second time this week, but not inviting
cameras in, not delivering any kind of statement afterwards, suggests that there is still quite a lot of work to be done and puts into question
whether or not this deal can actually get done by the end of this week as President Trump has repeatedly said, he believes is possible.
The U.S. special envoy, Steve Witkoff said yesterday that three of the four main sticking points have been closed out over the course of the last few
days of those proximity talks, but a sticking point still remains, and my sources have told me that one of the main issues here is the timeline and
the location to which Israeli troops would withdraw during that 60-day ceasefire, one of the main arguments that has arisen as both parties try
and close out this agreement.
We know that the United States and President Trump in particular, have provided assurances to the mediators, to Hamas, ultimately, that Israel
will remain at the negotiating table and that the ultimate goal here, during this 60-day ceasefire is indeed to reach a deal over an end to the
war altogether and the release of all of the remaining hostages being held there.
But there is no question that time is running out, not only for those hostages whose families and former hostages we have heard remind the world
that their situation is urgent, that every single additional day they remain in captivity is another danger to their lives, but also for the
people of Gaza who continue to suffer very intense Israeli bombardment, and also not only food shortages, but fuel shortages that are also affecting
hospitals in the Gaza Strip.
[16:30:54]
This image right here shows four newborn babies at Al-Helu Hospital in Gaza, all crammed into one incubator that would normally be closed and
normally just be for one premature baby. But this is the kind of situation that Gaza's hospitals, after being decimated over the course of this war,
are facing. Not enough NICUs and now fuel that is really posing a threat to the ability of these incubators to function.
We have seen hospitals like Al-Shifa Hospital shutting down its dialysis center. And the United Nations says hospitals are rationing fuel,
ambulances are stalling, and water systems are on the brink. They say they urgently need fuel to get into Gaza. We've reached out to the -- to COGAT,
the Israeli authorities responsible for coordinating that aid, they have yet to respond to our request for comment.
Jeremy Diamond, CNN, Tel Aviv.
PAULA NEWTON, CNN INTERNATIONAL ANCHOR: Now, as the death toll in Texas climbs, we'll bring you the latest on, of course, what is a desperate
search for those that remain missing. That's after the break.
(COMMERCIAL BREAK)
[16:35:09]
NEWTON: Hello, I'm Paula Newton, and there's more QUEST MEANS BUSINESS in a moment when we'll speak to grocery store giant Stew Leonard about the
rising cost of food and a shakeup at the top of Formula One. Why Red Bull's team leader was fired after 20 years. But before that, the headlines this
hour.
The death toll from last week's catastrophic flooding in Texas has risen to at least 119. An urgent search effort is underway to find more than 160
people who remain unaccounted for. Five campers and one counselor are still missing from Camp Mystic, a summer camp for girls. Records show that two
days before the flooding, a state inspector visited the camp, certifying that it had an emergency plan in place.
Russia has launched its largest drone attack on Ukraine since its full scale invasion in 2022. Kyiv says it involved hundreds of drones and more
than a dozen missiles, mainly targeting the city of Lutsk. The barrage came hours after U.S. President Donald Trump pledged more military support for
Ukraine.
And ex-CEO Linda Yaccarino is stepping down after two years. Her exit comes one day after the platform's chatbot made antisemitic remarks, and months
after Elon Musk sold X to his A.I. company. Yaccarino says she was grateful to Musk, but did not cite a reason for her departure. He responded, "Thank
you for your contributions."
The desperate search for the more than 160 people still missing in Central Texas continues this hour. That was following, of course, that catastrophic
flooding. Questions are mounting about Kerr County's alert system. In a press conference today the Kerr County sheriff insisted his office wouldn't
hide from scrutiny.
(BEGIN VIDEO CLIP)
LARRY LEITHA, KERR COUNTY SHERIFF: There's going to be an after action. Please, you all, listen to those words. After action, OK? Those questions
are going to be answered. I believe those questions need to be answered to the family of the missing loved ones, to the public, you know, to the
people that put me in this office. Those need doing. And I want that answer. And we're going to get that answer.
And I know that's going to be asked over and over. Please understand that, you know, we don't have -- we're not running. We're not going to hide from
anything. That's going to be checked into at a later time. I wish I could tell you that time. I don't know that time.
(END VIDEO CLIP)
NEWTON: Isabel Rosales joins us now from the scene.
Isabel, look, it was around this time yesterday that we found out that the number of people missing really was elevated to that 160 number. Why is it
so difficult? This is days later and still so many families wondering what happened to their loved ones.
ISABEL ROSALES, CNN CORRESPONDENT: Right. And I was actually out with volunteers when that Governor Greg Abbott press conference started, and we
heard from the governor that it was 18 missing. And then it suddenly jumped to 161 in Kerr County alone. That is the hardest hit county. And overall in
Central Texas, more than 170 people missing.
Paula, it came as a huge shock to the volunteers and first responders around me. But surprisingly, they were grateful to hear that number as well
because this is a focus for them. This is -- this is a goal in their heads. Now they know how many people they need to be working toward finding, and
we're on day six of this search and rescue operation. They haven't found in Kerr County, a survivor since Friday.
So a lot of these volunteers are pretty clear eyed with me that they believe at this point, it's just -- it's just going to be victims. They're
looking for remains. Now, I want to show you what's happening here around me because I am in Central Point, Texas, just southeast of Hunt. You're
looking at an RV park. I mean, let's swing this camera to the left. You see that? This was full of luxury RVs.
This is the Guadalupe Keys RV Resort. And what would have been their busiest weekend out of the entire year, there were 12 trailers here when
the water started to come through. And right behind me, what you can see is a bunch of strangers that have come together here to help out the -- the
owner of this resort to remove all of this debris. This is a propane tank that they're trying to move out of here and look back there, all the way
back there, that is a trailer. That is the trailer that belongs to Drew, the co-owner of this resort.
I want you to listen to him as he talks about what he experienced on the Fourth of July. Watch.
(BEGIN VIDEO CLIP)
DREW YANCEY, CO-OWNER, GUADALUPE KEY RV RESORT: I had a park manager and I don't know how he got alerted. He just called me and said, get going. We
got a flood coming. So at that point I put on what I have on and we took off and started evacuating the park.
ROSALES: So these are customers. You started going and knocking on their door.
YANCEY: Knocking on doors. Tell them to leave and we're evacuating, and they all got out.
(END VIDEO CLIP)
[16:40:09]
ROSALES: And it's possible that that door knock from Drew and obviously his resort manager to him may have saved lives here. Drew told me he didn't
receive an alert on his phone. So like many other stories that we've heard of survivors here, relying on door-to-door knocks from their neighbors who
are shouting, hey, the water is coming, the water is coming. He told me within a matter of 15 to 20 minutes, this was flooded carrying his trailer
all the way from over there, down here into the Guadalupe River.
Paula, I also want to share with you -- volunteers, yes, they found remains. First responders have found remains all through these days. But
they've also found personal belongings. Things like family pictures, children's dance recitals, baby pictures, wedding pictures. And that's
tearing them apart to their -- to their hearts. They've given it to the local fire department here, hoping that the rightful owners will one day
soon be able to come in there in person and pick up those mementos -- Paula.
NEWTON: Yes. Isabel, you know, gratifying to hear Drew say that everyone got out because when you see the devastation, it really does seem as if
they, in a matter of minutes, would have also been in grave danger.
Isabel Rosales, doing great work for us on the ground there. Really appreciate it.
Now, after the break, a veteran Formula One team principal is sacked after decades in the job. We'll have those details.
(COMMERCIAL BREAK)
NEWTON: A big shakeup in the world of Formula One. Christian Horner, Red Bull's veteran team principal, has been fired after 20 years in the role.
Horner had led Red Bull since it joined Formula One in 2005, overseeing, in fact, tremendous success.
Patrick Snell joins us now.
You know, Patrick, when I heard the news, I knew it was a big deal. But there is a lot going on behind the scenes here that frankly I do not
understand. And we have just pointed out, right, he had great success with Red Bull.
[16:45:05]
PATRICK SNELL, CNN WORLD SPORT: He really did, Paula. Yes, you're absolutely right. It's truly the end of an era. Massive success over two
decades continually. Drivers like Sebastian Vettel, more recently Max Verstappen, and it is fair to say the news did catch many by surprise. Red
Bull didn't give a reason.
This is interesting in itself, Paula. They didn't give a reason for Horner's dismissal, but they did thank the 51-year-old in a viral
statement. He had been Red Bull's team principal since joining F1, since the team became a force, became a team in F1 back in 2005, and just much
success over the last two decades. During the Brit's time in charge, eight drivers' titles, eight and six constructor's championships as well.
By our reckoning, 124 grand prix wins, 107 pole positions and 287 podium finishes with Horner. Now fair to say this is significant because in recent
years, Horner's time with Red Bull had been controversial. Red Bull launching that independent investigation, it came early last year, in
February it was after Horner was accused of engaging in inappropriate behavior towards a member of the racing team who hasn't been identified.
Horner later cleared of wrongdoing and reiterated his denial of the allegations after alleged leaked messages were distributed to members of
the F1 community. That was via a Google drive. CNN unable to corroborate the messages' authenticity. Red Bull previously having said it would be
inappropriate to comment further.
But no doubt, Paula, a massive new era now for the team as they try and move beyond this, as they try and move forward. Who comes next? Well, that
would be the Frenchman, Laurent Mekies, who works for Red Bull's sister team, that's Racing Bulls, and he will replace Horner as team principal and
CEO. He's already said that moving forward, the aim is to achieve what he calls great results and building on the incredible legacy left by Christian
Horner during his two decades in charge.
And I think one of the biggest things, I was giving this some thought earlier, what is he going to do with the driver situation there at the
team? One of the biggest things in his inbox, in his in-tray is going to be the future of the team's superstar driver, Max Verstappen. This, it comes
amid ongoing rumors that Verstappen could, could, leave Red Bull at the end of the season. Verstappen has been linked with a move to Mercedes, despite
the fact he has a contract with Red Bull until 2028. The Dutch driver, though, has repeatedly turned down the opportunity to comment on his
future.
So I think a case of watch this space very closely indeed. Horner as well have previously been convinced in his -- in his belief that Verstappen
would stay with Red Bull, but this, this may now all change things. We're watching it very closely indeed because I think there's a lot more to come
on this, Paula.
NEWTON: Yes, and in the thick of the racing season as well.
Patrick Snell, thanks so much. Appreciate it.
Now tariffs, rising prices and labor shortages are putting pressure on U.S. grocery stores. The CEO of Stew Leonard's joins me next. He'll have an
update on how the food industry is faring.
(COMMERCIAL BREAK)
[16:50:36]
NEWTON: Shares of W.K. Kellogg have spiked after hours on a "Wall Street Journal" report that Italian candy maker Ferrero is nearing a deal to buy
it. Kellogg's stock is up nearly 50 percent since the closing bell. The "Journal" reports that Ferrero will buy the cereal company for about $3
billion if the deal goes through. Kellogg's market value is reported to be about half that. That explains the jump in the stock price. The company,
though, is also saddled with $500 million of debt.
Now, the latest Michigan survey showed consumer sentiment is starting to rebound from near record lows. U.S. shoppers, though, are still grappling,
as you will know, with rising costs at the grocery store. Supermarket prices have increased over the past year, partially due to tariffs. On top
of having to raise prices, grocery stores are feeling the impacts of labor strains within the food supply chain.
Stew Leonard Jr. is the CEO of grocery store chain Stew Leonard's, and he joins me now from Norwalk, Connecticut.
Thanks for having us at your grocery store.
STEW LEONARD JUNIOR, PRESIDENT AND CEO, STEW LEONARD'S: Hi, Paula.
NEWTON: We are visitors, not even paying customers. But thank you anyway. Listen, give it, give it to us straight. What is the status report? Why are
grocery prices still so high?
LEONARD: Well, you know what, actually if you look at it, compared to last Fourth of July, they're the same. OK? There's a couple of things that are
up and a couple of things that are down. A couple things you look at is herd prices in the United States are at one of the lowest levels they have
been in decades right now. So that's drops down the supply so therefore the cost goes up a tad on the beef even though we kept our ground beef at the
same price this year.
Fish right now is pretty stable. Eggs are down. Strawberries are down, tomatoes are down. But then you have a couple upticks. Chickens up a little
bit. So overall, I mean, if you spent money they said it was 10 or 13 bucks or so per head for the holiday, it's about the same as this year. It's the
same thing.
NEWTON: I guess, Stew, though, is what the sticker shock remains is because, you know, the prices went up after the pandemic and they just kind
of stayed up. And, you know, I paid almost nine bucks for a pack of beef hot dogs the other day. It's startling when that happens.
LEONARD: Yes. Well, definitely COVID, you know, changed a lot of stuff. I know there was, you know, even our labor rate here at Stew Leonard's, you
know, is up $5 since COVID, per hour, per hour. So, you know, the benefits, all the -- our benefits for our people we take great care of everybody at
Stew's. You know, we have 3,000 people here and we want to give them great health care. But that's going up this year.
Energy costs have been going up. I talked to some of our farmers. They're a little happy with the fuel prices. They got to fill their tractors up every
morning with fuel. But everybody I talked to complains about labor right now. And, you know, if the hourly wage goes up, I mean, look what they did
in California. They raised the starting rate. What was it, up to $20 or $25 an hour? I mean, the customer is going to end up paying for that. And I
guess they do at McDonald's and stuff like that.
NEWTON: So where are you at, though, with the wage inflation in terms of how you're coping? You were saying it kind of went up from $17 to $22 since
the pandemic?
LEONARD: Yes, yes. And you know, so, so you just have to try to absorb these. And then we have to sort of figure out how to save some money on the
other end, you know, so, you know, we have to look at our expenses and -- and see if we can save a little bit there. And another thing that's really
tough on food retailers right now are the tariffs because, you know, all of the Europeans right now, what is it? I don't even know.
I got to look at my watch to find out what's happening with the tariffs. But it looks like about a 10 percent from Europe right now. And I was just
down at the fancy food show in New York City last Monday. And one of the things I walked down to Wisconsin aisle and they said sales are up on
Wisconsin cheese, double digits. And I walked over. I met one of the gentlemen from Holland that we do business with and get our, you know,
cheeses from, and he said his sales are down, you know, like about 5 percent.
[16:55:06]
So I think the tariffs have a little bit of an impact on European but I think it might be helping the U.S. production out a little bit.
NEWTON: And so some of the tariffs, and I get that, right, I mean more people buying American cheese than, let's say, Dutch cheese obviously
because it looks like a better deal. But when we talk about the tariffs there are also input costs. Things like aluminum. Do you fear that in the
next few months you're going to see it. Whether it's the price of cans, the price of packaging?
LEONARD: Yes. You know that's a good point. I mean, we buy very, very little from China. You know it's all fresh. We do a lot of local foods.
Local farmers and everything. But all of those little things will start creeping in, you know, the packaging costs, you know, for, for even
Kellogg's that you talked about earlier, you know, their cost may be going up a little bit and they'll end up passing it on to the retailer.
And hence, I mean, we can hold on as long as we can because we don't -- we don't want to raise prices, you know, and, you know, but it'll be passed on
to the customer at some point.
NEWTON: And, Stew, don't get me started on the price of cereal, that's for sure. We only, we only have about 30 seconds left. But you say you've got
to do something. You've just, you know, outlined a host of reasons why your prices are going up. How do you make sure that those groceries, you know,
continue to be affordable?
LEONARD: Well, here's one thing that consumers can do right there is there's a lot of apps out there, and even though, you know, price, we still
have sales. People call us up. They want to put their item, check the app out. OK. The second thing you can do freeze, freeze, freeze, baby. OK. We
did it during the COVID thing. If you see a great deal on porterhouse steaks, bring them home, wrap them real good and put them in the freezer.
The third thing you can do is look at private label right now because some private labels really good. You know. So in other ones you might want to
watch a little bit. But for the most part, private label tastes the same almost as a national brand at a lot lower price. And the one thing I always
tell everybody to do, walk away from those demos that you see in the store, the food sampling. OK, those -- we double or triple sales every time you
let people taste something. But, you know, we notice people are a little more hesitant about putting it in their cart right now. So stick to your
shopping list.
NEWTON: Stick to -- you're really letting us in on some of the secrets here, Stew. We're glad to hear it. We've been given a lot, a lot of advice.
LEONARD: Hey, if I can just, I know we're tight here, but right now it's --
NEWTON: We got 10 seconds.
LEONARD: OK. My wife and I lost a little boy, 2 years old, to a drowning about 30 years ago. We spent our life preaching water safety. It's drowning
season right now. This is at least up here around New York. And the number of drowning is going to go up. Please be extra vigilant around the water
and watch your child when they're in the pool, river, lake, wherever. OK?
NEWTON: Stew, we always --
LEONARD: Have a safe summer.
NEWTON: We always appreciate you giving that message.
Stew Leonard, Jr., for us, thanks so much. Really appreciate it.
LEONARD: OK.
NEWTON: And that is QUEST MEANS BUSINESS. I'm Paula Newton. "THE LEAD WITH JAKE TAPPER" starts next.
(COMMERCIAL BREAK)
END
